Four former Wilmington Trust Corp. executives “lied repeatedly” about the bank’s commercial loan portfolio to regulators, investors and the public in 2009 and 2010, a federal prosecutor said Monday at the opening of the officials’ fraud and securities trial in Delaware.
Michael P. Kelly of McCarter & English LLP, Harra’s defense attorney, said Wilmington Trust’s commercial loan agreements left room for extensions, sometimes not fully documented, that would allow borrowers to continue paying interest on loans that had passed their maturity date for payoff of all principal amounts.
“The evidence which I’m going to show you says, ‘This is a practice everybody knew about. This is a thing they always did.’ No one tried to hide it,” Kelly said. “It doesn’t say in [loan agreements] there you need a formal change in terms to extend the loans.”